Swedish politics had been dominated by the Social Democratic Party for over 70 years. They had been in government for all but nine years (summer of 1936, 1976–1982, 1991–1994) since 1932. The opposition parties decided that this was partly because they did not present a clear and viable alternative government. At a meeting held in the Centre Party leader Maud Olofsson's home in the village of Högfors, the four party leaders decided to form an alliance. The meeting ended on 31 August 2004 with the presentation of a joint declaration outlining the principles under which the four parties intended to fight the election.[1] A year later a similar meeting was held at Christian Democrat leader Göran Hägglund's home in Bankeryd, resulting in the affirmation of the alliance and another declaration.[2]

In order to do this, the member parties decided to issue common policy statements and to have a joint election manifesto. Each individual party still had its own manifesto and policies, but these will build up from common proposals in the Alliance's joint proposals. The Alliance has policy working groups for six areas: economic policy, education policy, foreign policy, the welfare state, employment and business policy, and policing. These were not set according to party size, but with one senior politician (often MP) and one staff per party, and following the idea that "everybody contributes and everybody gains".[3]

An example of this policy cooperation was the budget proposal that the Alliance parties put forward on 2 October 2005. The core proposal was a tax cut of 49 billion Swedish kronor, which is 1.9% of GDP and 3.3% of the total income of the public sector in 2005.[4] Each individual party also proposed its own policies in addition. For example, the Liberals want to spend 1bn kronor extra on tertiary education and the Christian Democrats want to have more benefits and tax deductions for families.

On 14 June 2006 Alliance for Sweden agreed on a common energy policy. It will apply over the next parliamentary term (2006–2010), and includes a promise not to shut down any more nuclear reactors during that period (Barsebäck 2 was shut down in 2005). The proposal is that no more reactors are to be built, that the nuclear phase-out law will be repealed and that all forms of energy research will be legal and able to receive state grants (research on nuclear power is currently forbidden in Sweden). An Alliance government would also grant any applications to increase the output of the existing plants, provided that it would be safe to do so.[5] This has been hailed as a historic step, as disagreement over nuclear power has long plagued the centre-right in Sweden: the Centre Party opposes nuclear power, the Moderates and Christian Democrats support its continuing operation while the Liberals want to build more reactors. Some doubts have been raised about the long-term survival of this compromise, as neither the Centre Party nor the Liberals have changed their fundamental positions on nuclear power.

On 5 July 2006, during the politics week at Almedalen on Gotland, the Alliance parties announced a plan to abolish property tax. Their agreement promises to freeze taxable values at the current level (so that the revaluation that is being carried out will not apply), and to reduce the rate of tax on apartments from 0.5% to 0.4% of their taxable value.[6] A ceiling of 5000 kronor will also be imposed on the taxation of the value of a house's plot. The parties are also agreed on the abolition of the tax and its replacement with a municipal charge independent of the value of the property; this reform is planned to be carried out in 2008. Property tax is estimated to bring in 28.1 billion kronor in 2006, rising to 30.2bn in 2007 and 32.2bn in 2008 (as taxable values rise). The first stage of the Alliance's plan (freezing property values, capping the tax on land value and reducing the rate for apartments) is estimated to cost around 4-5 billion kronor. The financing of this is to be revealed in the Alliance's manifesto in August 2006.

Alliance for Sweden released its election manifesto,[7] entitled More people at work - more to share (Swedish: Fler i arbete - mer att dela på), on 23 August 2006.

Minister for FinanceAnders Borg presented the government's first budget[8] on 16 October 2006. The budget contains many of the proposals that were prominent in the Alliance's election campaign: both the job deduction in the income tax, which will also be larger for old people to encourage them to remain in the labour market, and the "fresh start jobs" with reduced payroll tax for companies employing people who have been unemployed for more than a year will come into effect from 1 January 2007. Tax reductions for companies hiring young people and for domestic services are to come into effect on 1 July. The tax reductions announced in the budget total 42 billion Swedish kronor,[9] of which the income tax deduction is 38.7 billion. Other changes include the ending of employers' co-financing of sickness benefit after the second week, reduction of unemployment benefits and considerably raised fees to unemployment funds, resulting in a substantial decline in union density and density of unemployment funds.[10][11] Unemployment benefit would remain 80% of previous pay for 200 days then drop to 70%. Benefit would be payable for a maximum of 300 days, or 450 if the recipient has children.

In 1991 the Alliance was called the Center-Right Parties. After the election was lost in 1994 the Center-Right Parties was dissolved but the centre-right opposition parties continued to work together. In 2004, the four parties Moderate Party, Centre Party, Liberal People's Party and the Christian Democrats wanted to collaborate again. So they started the Alliance. Alliance is a revival of the Center-Right Parties.